Patents, a Missed Priority

We sense a congenitally inadequate motivation of democratic legislatures
the world over to deal with
patent issues. Legislators are rewarded by many votes by the electorate when
they are concerned with the common man. Patents, however, is a concern in the
ranks of uncommon women and men, the inventors. In the present era of the common
man, the latter are no darlings in legislatures. They are abused when their
patent rights are voted null and void, so that the masses (who often happen to
be the voters) can get new medicine and new Internet services for free, or for a
fraction of the real cost to producers. The latter have to bear the true expense of the entire
invention process.

In advanced countries it is possible to patent genuinely
new industrial advances of production, products, or processes. To begin, a
patent involves publication of an innovation, as required in all scientific
discoveries. The innovation, henceforth, is no longer a secret, but the patent gives the owner control
– a kind of private property – of the commercial use of the innovation during
a period of time, usually 20 years.

The copyright is a similar intellectual property right that
gives control for a stated period of time to the creators of written or artistic
works. The period of copyright protection is longer than for a patent and varies
more between countries. Patents and copyrights involve, both, very special cases of
property rights requiring separate legislations. Copyrights are also related to
freedom of speech, while patent rights are not.

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Patent rights and other intellectual properties are legal
products of special interest to innovative persons and their settings in society. Some critical such
positions in society are mentioned in Proposition 10:8, reproduced here in the
margin. For the study of patents, we should focus on Makers of knowledge and their Procurers in the economy. We locate them in Rows
N and S in the tables of occupations found in a section on “Societal Realms and
their Functions” (Zetterberg 2010, 185 in 2nd ed.)

Patent rights have proven a most useful legal device to
link science and economy, promoting growth in both. Growth in the economy owes
more to technological patents than anything else that the body politic can
provide. The importance of patens is recognized by The US Congress in The
Bayh-Dole Act of 1980 that allows universities and non-profit research
organizations as well as small business which do research under government
contracts to apply for patents in their own name and keep the profits.

More or less watered-down versions of the Bayh-Dole law
have been introduced in some other countries. However, the rules for
commercialization of inventions by European professors are fragmented.
Universities vary and different countries vary in their practices. The general
right in Bayh-Dole for small business to patent work financed by government is
virtually unknown in European legislation. The strong socialist political
parties in Europe have generally been against any such “give-away” to small
business and the big labor unions in Europe have usually distrusted the
self-employed.

It is distressing that the administration of
this device is, at present, given such
low priority by politicians in both the United States and the European Union. In
the United States, the Patent Office is underfunded and
understaffed, and the frequent phrase “patent pending” indicates for everyone to
see a huge backlog of applications.

In the EU, a patent at the time of this writing must still
be applied for in each national patent office. The half-century old promise of
an all-European patent has been incessantly delayed by commissionaires and
national politicians (or nationalist politicians since a main remaining hang-up
is the language of the patent application). The low priority given to patent
administration by governments on both sides of the Atlantic illustrates a general
weakness of a democratic polity to respond to the needs felt strongly only in
the central zone of society, and not in society at large.

Speaking generally, obtaining a patent in Europe is a serious
process. Patents are issued by a national Patent Office by careful
professionals taking the reqquired time to examine the originality of the claim,
and whose verdict is rarely challenged. To obtain a patent in the United States is
an easier, but not necessarily a faster process. However, in many cases, a US patent is not
fully validated for safe exploitation until it has been challenged in the court
system by patent lawyers and judges. At the end of such a court process, claims
for compensation in a US patent suit are normally reduced to a handful of
percentage points of the huge amount initially claimed for damages. Still,
considering the more frequent court validations, the total cost of secureing
a significant US patent may be huge compared to securing a European patent.

When a patent runs out, the knowledge lodged in the
patent is free for all to use. During the patent period, however, the owner
enjoys established rights of intellectual property. He
can keep the discovery for himself, license it to be used by others for a fee,
or sell it where patents can be bought and sold, pass it on to heirs, or simply
give it away to anyone. Similar rights are given to copyright holders.

Common forms for the exploitation of a patent are to sell or license it
to some established and forward-looking corporation that complements or improves
its existing or planned production lines. Or, the inventor and patent holder may sell a patent
to an entrepreneur who puts it to use in a new business. If no one wants to buy
a license, some inventors start a new business of their own to make the most of
the patent; they usually have a long way to prototype, production, and
marketing, each step requiring more effort and capital than the previous.

In advanced countries, new firms based on new patents, together with others firms
in similar positions, can be put in “incubators” run by financial interests with
all types of management competence in-house. In these incubators, the budding
companies grow until product design, marketing, sales channels are in place and
functioning with volumes making the firm and its patent, attractive to new
owners and investors. The incubators shorten an otherwise long path between
invention and market.

Legislation about engineering patents
and artistic copyright represents a great invention of Western jurisprudence, a genuine
contribution of the body politic to the realms of science, art, and economy.

A patent means that an actor in the realm of science or
technology is given a right by the body politic that is enforceable in the
judiciary to use an innovation as their private property in commerce. A patent,
thus, involves a three-way agreement between these societal realms:

Science ≠≠≠ Economy

Science ≠≠≠ Polity

Economy ≠≠≠ Polity

The sign (≠≠≠) used here
signals considerable difficulty for these realms to reach a consensus (See the
Table of Valance (Zetterberg 2010, 230 in 2nd ed.). The current state of
general inefficiency and delay in patent procedures may be due to this difficulty.

Copyrights are similar three-way agreements, but involve
the societal realm of art, rather than that of science and technology.

A portfolio of active license-fee patents can be held,
not only by the individual inventor, but on a larger scale by corporations. Such
portfolios of patents are essential in much of everyday production that is sold
to households, businesses, health services, governments, et cetera.

In some
circumstances, patents are held by a corporation simply to keep the competition
at bay, a practice slowing down third parties, economic growth, and the general
progress intended by patent legislation.

After
10 years as member in World Trade Organization, China is not considered by GM as
a totally reliable protector of patents. When General Motors went through a
reconstruction after the 2008-09 financial crises and the government bail-out of
the company, it put its subsidiary Saab on the market to cut its losses and to
raise cash. But GM refused a good bid to sell Saab to a leading Chinese auto
corporation. GM did not want some valuable patent-supported production processes
and auto parts in Chinese hands; its long-term plan was to expand its own
production in China, which has the world’s most expansive car market in the new
century. Instead, GM sold Saab to Europeans at a lower price and with restricted
clauses about the GM proprietary technologies and auto parts. When the
Europeans, in turn, wanted to sell the Saab enterprise to China, GM balked and
invoked the restrictive clauses.

The long hand of modern finance has recently also extended
its grip in
patents and copyrights. In finance, patents and copyrights are classes of
economic assets. Financial firms securitize patents and copyrights, i.e. bundle
them to be sold and held as bonds or other marketable devices. This may be a growing market, at present
without much transparency and regulation.

A portfolio of copyrighted books, or one of copyrighted
songs, may also be transferred to a corporation or hedge fund. Shares of portfolios of patents
and portfolios of copyrighted music may, nowadays, be held also by private
investors, totally unrelated to the original creators, as a class of wealth and
as an alternative to investments in stocks and bonds.

It was long an established praxis that no patent office
could
grant exclusive patent rights for two phenomena: laws of nature and mathematical
equations. This good praxis is no longer self-evident. Patents are issued for the
composition of parts of natural bodily processes, and patents (not just
copyrights) are sometimes issued to computer versions of mathematical
algorithms.

A process of undermining the very institution of
patents is underway in the beginning of the Twenty-first century (Loughlin 2008).
Patent rights are about to go haywire due to the rule bending initiated by vested
commercial interests. The invaders assume that scientific regularities, such as
a part of the genetic code, can be patented, and that such "property right" can
be defended in the courts. Technologies to identify, measure, and change the genome
should, of course, be patentable. But should patents be issued of a gene itself,
or a sequence of them found in the human body? In fact, at the time of this
writing, corporations do have patents to some of your, and mine, genes.

In 2012, however, on the application of Greenpeace, the
Eu-ropean Court of Human Rights in Luxemburg (2: 41) overruled the issue of a
patent to the German neuroscientist Oliver Brüstle who had found a way of
starting the development nerve cell from embryotic stem cells. This kind of
research is not affected by the court ruling. Professor Brüstle is rightly
famous for his discovery and is honored as such in the scien-tific community.
But the court ruling indicated that on moral grounds he will not be allowed to
personal riches from a commercialization via a patent of a discovery of a
process in the human body. The interest of private industry in this field will
probably take other turns if this ruling by a court whose jurisdiction applies
to states, not individuals, becomes effective worldwide.

The Brüstle ruling will not change the fact that a major
break has already occurred in the tradition that patent rights are re-stricted
to engineering products and processes that are original and marketable. Extensions of what is possible for an inventor to patent may turn
the bold spirit of discovery into an anxious monitoring of the avoidance of the
use of immaterial rights
an behalf of powerful patent holders. In extreme cases, this may actually push normal
university teaching with laboratory exercises into criminal activity. This
breaks a key norm of science, that is, that discoveries of the laws of nature
including similar natural biological processes are to be offered for free
to all.

There are also varied legal devices at play in the
extension of
patent right to be valid on a market beyond the original period of the patent.

Those qualifying for patents and copyrights, The Makers,
as we call them, are a much smaller group than others in society, the Keepers,
Brokers, and Takers. Thus they are grossly underrepresented in the electorate,
and this is also normally reflected as inadequate representation in legislatures. At the same time, Makers are clearly overrepresented in the central zone
of society where the stars of all the societal realms are found.

In this discussion of patent rights for scientific and
technological innovation, we note an irratic and deteriorating protective
tendency. Copyright protection of songs, artwork, and written texts may be
equally watered down by populist politicians and the new “piracy parties” having emerged in Stockholm and Berlin. It is ironic, however, that leftist
intellectuals usually defend the copyrights of their own products of creative
writing, but elsewhere preach that “property is theft.”

References:

Loughlin, Robert B. The Crime of Reason and the Closing
of the Scientific Mind. New York: Basic Books, 2008.